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HR month in review - February 2024

Brian Sommer Profile picture for user brianssommer February 29, 2024
Summary:
2024 continues to deliver a bumper crop of HR, return to office and related topics. But culture, employee experience, and empathetic leadership seem to be AWOL. Let’s dive into the best ideas of the month.

HCM

February continued the avalanche of news re: HR and HR technology. And, like last month, it was a mixed bag with bots, AI, Return to Office (RTO) and War for Talent matters filling our newsfeeds.

Here are some of the more thought-provoking stories:

Business Insider reported on recent Gartner research: 

If you're a star at work but your boss makes you head into the office, you're more likely to start hunting for a new gig.

Research from Gartner indicates that high-performing workers are 16% less inclined to stay in their jobs when employers roll out strict return-to-office mandates.

Gartner defined the high-performers as those advancing more quickly in their career than their peers.

Gartner's survey, conducted from May through June 2023, showed that employees, in general, were 8% less likely to want to stick around when bosses put in an inflexible RTO mandate. Among women, 11% were less likely to want to stay. That's partly because women often value flexibility and might feel they face less bias when they're not in the office, according to the survey.

And among millennials, who Gartner said were most likely to have to juggle caregiving duties, tight rules about being in the office made them 10% less likely to want to stay at their jobs.

Of course, wanting to quit and leaving are two different things. Still, Duffy said, having unhappy workers stick around can be its own risk.

That research confirms what I’ve believed is a logical correlation: RTO policies trigger adverse impacts on employee commute costs and free time. The next study will likely point out that RTO has an adverse impact on employee experience (EX), culture and performance.  

Well, I didn’t need to wait long for that prediction to be proven true. Fortune reported

We surveyed 1,400 full-time U.S. employees who were mandated to return to in-office work and found that they had higher burnout, stress, and turnover intentions. They also had lower trust in their organization, engagement, and productivity levels. Our results indicate that if the return-to-office transition is not handled with a high level of humanity, sensitivity, and empathy, workplace culture suffers, and the workforce's sense of belonging plummets.

We also found that RTO results in pressure on employees’ flexibility, time, and even bank accounts. If you are struggling to adjust to a mandated return to the office, know that you are not alone.

The most challenging aspect of returning to the office is the commute. This isn’t surprising because commutes of only 30 minutes are linked to higher stress and anger, while 45 minutes or more is linked to poorer overall well-being, daily mood, and health. 

What is surprising is the second most challenging aspect of returning to work: the loss of flexibility to switch between work and home tasks for things like accepting a delivery or switching over the laundry between meetings. In a time-starved world, even the smallest time savings can be very important as people attempt to 'do it all'.

While some leaders might read this and think “Ah-ha! I knew people were multi-tasking when they should be working!”, the truth is, that remote work is actually a net gain for the organization. Research has found that people in remote work give more total hours to the company.  

We also saw that an organization’s decision to require in-office work represents a financial burden for employees. The average employee returning to the office spends $561 per month on transportation, additional child and pet care, and domestic assistance. That is comparable to the average two-person household’s grocery bill in the U.S. for the entire month.

I don’t care if you make a little or a lot but $561/month in unplanned and non-reimbursed expense impacts a household budget materially. And, the boss that requires this for his/her control and power reasons, truly needs professional help. 

Well, what do you know, poor managers ARE part of the problem today. It appears that they weren’t trained for work world of today. According to CNBC

Poor management is also causing role confusion, Harter says. Today's managers are burned out, disengaged from their work and are more likely to be looking for different jobs, according to the report.

Managers 'have more remote working, higher demands for flexibility, changing customer expectations, and 70% report no training for how to manage a hybrid workforce', Harter says. Overworked bosses can't meaningfully coach their employees and set clear expectations for good work, he adds.

If managers could do one thing to boost engagement, it's to focus on delivering 'meaningful feedback', Harter says. Meaningful feedback is as simple as meeting once a week to discuss recognition and praise, collaboration, goals, priorities, and strengths, he says.

This weekly practice 'develops high-performance relationships more than any other leadership activity', according to Gallup.

I suspect this isn’t only just a lack of training to blame here. I’d also suspect that firms have:

  • too few empathetic leaders in their organizations. 
  • have excessively wide spans of control so that managers don’t know but a fraction of their staff
  • overworked/overloaded managers who have no time for employees
  • etc.

Hmm, maybe I guessed that one correctly, too. The need for ‘well-educated and deeply skilled’ leaders may be diminishing.  Newsweek reported:

Alex Beene, Financial Literacy Instructor for the state of Tennessee, said Santos' plight also reflects an ongoing 'white-collar recession'.

'Companies that had an abundance of jobs for the well-educated and deeply skilled before and during the pandemic are starting to scale back and cutting many of those jobs in the process', Beene told Newsweek.

'The result for some seeking employment will be the feeling that despite a labor market that still has many openings, it may feel like positions that fit their background and income expectations are out of reach or non-existent.'

Additionally, companies have become known to leave job listings up as "evergreen postings" just in case a top candidate applies.

'That position isn't really open,'  job board RedBalloon CEO Andrew Crapuchettes told Newsweek. 'These ghost-postings can cause frustration amongst jobseekers who, like this woman, are very capable and talented, but they may not have found the right fit yet.'

So, jobseekers today are fighting all kinds of obstacles. They are competing with other jobseekers who are using generative AI to create idealized resumes that game the process and may keep highly qualified applicants from getting interviews. They must also deal with firms who are posting jobs that, in truth, don’t or won’t really exist (see prior quotes). And, this CNBC video from HR expert Peter Capelli drills deeper into the reasons why job hunting today is so rough. 

Bad employers and their managers are a recurring focus in HR articles this month. One industry that’s particularly close to me, Accounting, is in for some rough sledding in the coming years. Worse, these problems are institutional in nature and the staid profession may struggle to adapt. 

Accounting is messed up as:

  • Accounting personnel are expected to work massive amounts of overtime during ‘busy season’, month-end processing, audits, quarter-end processing, tax filing preparation, etc. It’s sometimes easier to identify the day each month when an accountant has a few hours off. How bad is it? A work year is defined as containing 2000 base hours (i.e., 50 weeks of 40 hours per week) but professionals are expected to work (and/or charge clients) for an additional 800-1000 hours per year. This is not how you create work/life balance but it’s the path to partnership for those in a big accounting firm or the way to get a promotion to Accounting Manager, Controller, etc. if you’re in corporate accounting. 
  • All of this overtime and dealing with never-ending fire drills is hard on the personal life of accounting professionals. In one Big 4 office I worked in, almost every audit partner had been married and divorced at least once. There were also lots of smokers, alcoholics, etc. I never figured out whether public accountants possessed addictive personalities or the stress of the job triggered awful coping mechanisms. Whatever the cause, the long-term effect of this is a career no sane person would want. 

So, here comes the Wall Street Journal to shine a bright light on this industry:

The 30-year-old isn’t alone in his discontent with the industry. Accountants have long been viewed by people in the profession as underpaid and undervalued compared with positions in tech and banking. Now the foot soldiers of the profession are leaving the field in droves. Accountants cite low salaries, mundane tasks, burnout and the threat of new technology like generative AI as reasons for considering other industries.

Professionals in any field may find it isn’t a fit for them, but accountants are moving on or considering doing so at a time of an already widening shortage of these workers, who often specialize in either auditing financials or preparing taxes. 

There were about 1.65 million accountants and auditors in the U.S. in 2022, up 1.3% from the previous year but down 2.6% from 2020 and down 15.9% from 2019, according to the Bureau of Labor Statistics’ current population survey. More than 300,000 accountants quit their jobs between 2019 and 2021, data show.

Bad treatment of employees goes beyond the accounting profession though. The Washington Post highlighted a couple of unfortunate situations with one that involved 60,000 managers: 

At AT&T, for example, more than 60,000 managers were mandated to return to the office on a hybrid basis starting in July. But the company reduced the number of offices for managers, making it harder if not impossible for some to commute, employees said. Workers said the mandate also applied to employees who had remote allowances even before the pandemic and those who were hired permanently remote during the pandemic. They said the majority of workers weren’t offered any relocation assistance as part of the mandate, a detail that Chief Technology Officer Jeremy Legg confirmed during a recent town hall.

'It doesn’t surprise me that there are people that are upset,' Legg said.

As a result, several workers are waiting to be laid off or are looking for new opportunities, employees said.

Workers at dating app Grindr were put in a similar predicament after their office mandate came down last year. Employees were required to work from assigned offices despite where they live. For some workers, that meant they’d have to move across the country rather than work from the office in their city. It similarly asked workers who had assumed they were permanently remote to comply. As a result, about 45 percent of Grindr’s 178 employees quit, workers said.

Even enterprise software firm SAP got into the act. It opened the month with RTO announcements but workers weren’t happy with it. That same Washington Post article noted this:

Thousands of employees at Europe’s largest software company, SAP, have signed a letter saying they feel “betrayed” by the firm’s “radical change in direction” on its back-to-office directive, with many threatening to leave rather than return to offices or work on-site with customers at least three days a week starting in April.

It’s a stark shift from the company’s pre-pandemic approach, which allowed about half of SAP’s workforce to be remote. As recently as 2021, SAP’s CEO, Christian Klein, described SAP as a '100 percent flexible and trust-based workplace.' But like many executives, Klein’s view has changed as labor market dynamics have tilted toward employers having the upper hand. After the company reported strong earnings last month, Klein expressed frustration with remote work’s effects on SAP’s culture.

'i'm not a big believer that on a video conference platform you can understand our culture, you can get educated, and you can get enabled to do your job best,' Klein said, according to reporting from Bloomberg News.”

'Within two weeks of SAP’s announcement on office attendance, which was first reported by Bloomberg, a letter opposing it had amassed more than 5,000 employee signatures. The labor group representing SAP employees in Europe has deemed the policy 'unreasonable' given prior assurances employees were given about remote work.'

When 5000 employees will risk career retribution to sign a petition against a management dictate, you know you have an employee experience problem. That’s doubly ironic given that SAP sells HR application software.

On the AI Front…

HR and AI also made the news in some interesting ways.  In a great Fast Company article, we learn that resume bots are “killing job opportunities for people who need them most”;

AI was supposed to streamline the whole hiring process. Instead, it’s caused the number of applicants to balloon. The study notes that a decade ago, the typical job posting received 120 applicants, but this figure has since risen to 250. Overwhelmed companies have responded with more draconian automated filters in the hiring software, leading to the inevitable rejection of lots of otherwise qualified candidates, and to tons of unemployed job seekers.

The study’s authors say these résumé-scanning programs are used by 75% of U.S. companies (99%, when you limit it to the Fortune 500), and nine in 10 executives they surveyed admitted their programs weed out qualified candidates. In an interview, lead author Joseph Fuller gave the Wall Street Journal examples of hospitals rejecting nurses whose résumés didn’t mention 'computer programming', though the job itself only required logging patient data into a computer, and retailers nixing applicants who didn’t have 'floor-buffing' experience.

The fact that companies use these tools while knowing they are rejecting qualified jobseekers is stomach churning. I’m waiting for some monster class action suit to emerge and maybe I can get an expert witness gig out of it, too!

My take

When so much is being written and studied on a couple of areas (notably RTO and AI in HR), CHROs and in-house counsel should be paying rapt attention. Here are some key items to ponder:

  • Operational and other non-HR executives seem to be making policy decisions re: RTO. Where is HR in this? Are they going along with these calls or are they challenging some aspects of them? Rubber-stamping a bad decision is a bad look for HR leaders and the function overall. 
  • The RTO impact on employee experience and culture doesn’t seem to be getting internal HR attention either. Again, why?
  • RTO decisions need to consider different demographic and psychographic groups. Experienced employees may not need or want all of the office experience. They likely have had a career’s worth of it pre-pandemic. Young workers might benefit from additional in-person interaction as would persons seeking to fast-track their careers.
  • Employers should be wary of some people being over enthusiastic re: RTO. Toadies, sycophants and other political (not competence) powered individuals crave face-time. They’ll be big boosters of RTO as it might enhance their career progression prospects. But, does your firm want highly competent team members or individuals who live to climb over anyone in their selfish path to the top? 
  • Empathetic leaders are not part of the published RTO stories so far. I suspect empathetic leaders (i.e., those who understand culture, work/life balance, employee experience, etc.) are not pushing these initiatives and aren’t getting press for their more humane efforts.

What’s also missing in some of the current dialogue is the potential for AI to make matters worse (not better). That angle will take some time to fully develop but you can sense it’s coming.  And when it does, I’m sure I’ll have no shortage of articles and research reports to excerpt. Until then, let’s be smart about the people in our firms!

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